Special Issues

Mad As Hell

Is a former legislator’s complaint a quixotic quest—or a moment of truth?

January 29, 2013, 8:00 pm

By

Joe Carraro calls himself “the average Joe.” That’s the name of a website he created, full of YouTube videos of him at a fake news desk, editorializing about issues ranging from stimulus waste and Obamacare to Wall Street malfeasance.

On a recent Saturday, Carraro is having lunch at Albuquerque’s Flying Star Café. A former state senator, he represented the city’s west side for 20 years, earning the nickname “the Italian stallion” for his impassioned speeches and Italian heritage. A tall man, he has a receding hairline and eyes that light up whenever he makes an important point.

“It’s all about making money,” he says. “That’s what politics is all about. Business is all about that. I know business as well as anyone. I was educated primarily in how to make money in business. And so when I look at it I say to myself, ‘You know the purpose of business’—I’m like Milton Friedman. He says the purpose is to make money. Their object is to make money. We have to recognize that.”

Carraro has a history of zeal. During his 20 years in the Legislature, he introduced bills to toughen DWI sentences for repeat offenders, reduce the state’s eminent domain authority and help people with disabilities. In any given session, he would author as many as 30 bills.

Carraro left politics in 2008 after losing a Republican primary battle for New Mexico’s First Congressional District. But he entered the fray again last summer, kicking off a heated campaign against Republican state Sen. John Ryan—a lobbyist who had represented Bernalillo and Sandoval counties in the state Senate since 2005.

Ryan didn’t face a Democratic candidate, and he would have sailed to the Roundhouse unopposed had it not been for Carraro, who set out to be New Mexico’s first independent state senator since 1915.

Carraro lost, but his campaign against Ryan didn’t end there. Over the past few months, Carraro has urged various state officials to investigate whether Ryan’s lobbying work constitutes a conflict of interest.

On Sept. 9, Carraro filed a complaint with Attorney General Gary King, alleging that Ryan was violating local, state and federal laws.

“I left the State Senate in 2008 as an Independent with no intention of running for office again,” Carraro writes in the complaint. “…[A]fter investigating the veracity of these claims, I decided to run to stop his wrongdoing since he was not only going to represent my district, but was also lobbying for clients whose decisions would eventually have negative impacts on utility rates, the cost of government and the input us citizens would have determining our future.”

Legitimate or not, Carraro’s allegations underscore a larger issue in New Mexico, and in many states with unpaid “citizen” legislatures. State lawmakers work only 30-60 days per year. For each day of work, they’re paid a little over $150. The upshot is a Legislature composed of teachers, scientists, consultants, lawyers—and even lobbyists. For taxpayers, it’s cheaper than paying the state’s 112 lawmakers for a year’s worth of full-time work.

But there’s also a downside: While serving in the Roundhouse, almost every lawmaker will eventually face a potential conflict of interest. On Jan. 31, state legislators’ updated financial disclosure statements will be released. How various lawmakers address their sometimes-conflicting interests will reveal much about them. But oversight is limited, and in the murky world of lobbyists-as-lawmakers, a loose honor system is all that stands between a taxpayer and his or her money.

That one of them should get away with what Carraro claims are violations of federal, state and local laws makes him mad as hell.

Carraro is an unlikely whistleblower.

After obtaining a political science degree in 1967 from the University of New Mexico, he says he went on to be a Wall Street stockbroker and analyst before eventually returning to Albuquerque to run a pizza shop in an alleyway near UNM. He earned an MBA from UNM’s Anderson School in 1982 and later became a business consultant. In 1984, he was elected to the state Senate. State records show he registered his consulting company, Carraro & Associates, Inc., in the summer of 1997, to advise clients like Real Turf, a now-defunct artificial turf company, on how to make money.

Later, some of that work got him in trouble. In 2008, the Albuquerque Journal ran a damning front-page article linking Carraro’s consulting work for Real Turf to bills he sponsored that would appropriate funds for eventual Real Turf contracts. Carraro denies any wrongdoing and showed SFR a private letter he says he sent to the Albuquerque Journal’s owner, explaining that another lawmaker sponsored partial funding for a little league field, and that Carraro had previously sent the Journal a press release “informing them of my work [to] offer transparency as a public official.”

But Carraro lost the Republican primary by a large margin to Bernalillo County’s then-sheriff, Darren White—whom then-Pres. George W Bush personally endorsed—who in turn lost to current Democratic US Sen. Martin Heinrich. Afterward, Carraro switched his registration from Republican to Independent and decided to put more time into his writing career.

“The first manuscript that I wrote was dealing with the issue of pedophiles,” he says. He speaks in rapid, run-on sentences, jumping from topic to topic. “That was an issue I dealt with up in Santa Fe—about: What do you do? How do you solve this problem? It was always—I tried to pass legislation, you know, and there was always a group that was against what I was trying to do.”

Former state Sen. Steve Komadina, R-Sandoval, describes Carraro as a compassionate but sometimes divisive figure.

“He was a very vocal, outspoken,” he says, then pauses, “trying to find the right adjective—flamboyant personality…” Komadina eventually compares Carraro to Vice President Joe Biden, former Gov. Bill Richardson and Don Quixote.

But the “average Joe” moniker isn’t too far off. Former state Rep. Janice Arnold-Jones, R-Bernalillo, says Carraro “truly became the voice of the people on a number of issues.”

“And that really was his legacy,” she says. “You know, there are other things at the Legislature that I remember about Joe Carraro: Could he hold the floor? Was he entertaining?…Was he passionate? Absolutely. Very smart. Very, very smart.”

But Komadina says Carraro sometimes failed to hold the attention of his fellow senators.

“If people would listen to him, he’d usually have really good things to say,” Komadina recalls. “The problem, because he talked [so much], many people would not listen.”

Ryan, who represents part of Carraro’s old district, is younger and more taciturn. “Quiet. Introvert,” Komadina says. “Doesn’t talk much unless, you know, directed to.”

Ryan declined repeated requests to comment for this story.

His views often align with those of Republican Gov. Susana Martinez: He’s authored key Martinez bills, such as a bid to repeal the law allowing illegal immigrants to obtain driver licenses, and enjoyed significant financial support from her adviser, Jay McCleskey, during his 2012 reelection campaign. He also has ties to Washington, DC, having worked for former US Sen. Pete Domenici, R-NM, and former US Rep. Joe Skeen, a Republican from Roswell. According to state records, Ryan incorporated his lobbying firm, Capitol Consultants LLC, in October 2003, a year before he first ran for the state Senate.

Once elected in 2005, Ryan began working as a federal lobbyist, pocketing at least $1.3 million from clients with substantial business interests in New Mexico, according to federal data. Throughout his state Senate career, he voted on appropriations that would benefit those clients. At least one client’s project—a $500 million water pipeline for eastern New Mexico—has not only benefited from state funding that Ryan voted for, but has also led to higher taxes for Clovis residents. Real Turf also hired Ryan—and also benefited from his spending bills.

To Arnold-Jones, that’s a problem.

“I do think that, if you are lobbying and lobbying is your job, that there is an inherent conflict if you are a representative…even if you are lobbying in Washington,” she says. “…I have tremendous respect for lobbyists, but the citizens deserve some clear lines. And as a legislator, you’re supposed to seek out the many sides of an issue. If you’re the lobbyist for that issue, I think the appearance is that you do heavily weigh towards the position that you’re lobbying for.”

Former Clovis Mayor Gayla Brumfield says state Sen. John Ryan, R-Bernalillo, has “been huge” in helping along a water pipeline project for eastern New Mexico.

Two years ago, Martinez kicked off the 2011 legislative session with her first-ever State of the State speech. Reiterating a promise “that members of my administration would serve no interest other than that of the public,” she proposed barring state legislators from lobbying for two years after leaving office.

“There must be no question that public officials are serving only the interests of the public, not positioning themselves for a big payday with a special interest group,” Martinez declared. “Representing the people of the state is the role of elected and appointed officials—not lobbyists.”

She didn’t mention those—like Ryan—who were already doing both jobs.

New Mexico is one of 15 states with few or no restrictions on lawmakers’ ability to work as lobbyists after leaving office, according to the National Conference of State Legislatures. Known as “revolving door” laws, these types of restrictions are meant to prevent conflicts of interest.

But even during their terms, it’s not unusual for New Mexico lawmakers to serve multiple—and sometimes conflicting—interests.

Freshman state Sen. Daniel Ivey-Soto, D-Bernalillo, also as an executive for NM Clerks LLC. Just last year, the former director of elections for the Secretary of State’s office led the association in writing a voter ID legislation in the event that a GOP voter ID proposal made it through the Legislature.

He won’t detail exactly how he’ll handle his own potential conflict of interest, but stresses that his day job concerns mostly “policy questions” and doesn’t involve state appropriations.

In general, the only taxpayer money New Mexico state lawmakers receive are per diem expenses. Currently, lawmakers receive $153 each day they’re at the Roundhouse. During a 60-day session, that’s $9,180 per lawmaker. It adds up to a little over $1 million in taxpayer money going to elected officials each year. But that figure doesn’t include per diem payments lawmakers receive for attending committee meetings held around the state when the Legislature is not in session. A lawmaker working year-round can make more than $20,000, not to mention benefit from a taxpayer-funded pension when he or she retires. But to many lawmakers, that’s hardly enough to live on.

“Per diem doesn’t do squat,” says state Sen. Linda Lopez, D-Bernalillo, a single mom and small business owner who chairs the Senate Rules Committee and chaired the Interim Legislative Ethics Committee. “Do you know how much a hotel costs in Santa Fe?”

State lawmakers should receive “at least a base salary,” she says. “It at least takes away that air of conflict.”

House and Senate ethics rules state that in order to avoid conflicts of interest, a lawmaker should ensure that his or her job “does not impair his impartiality and independence of judgment in the exercise of official duties,” and that he or she must vote “unless he has a direct personal or pecuniary interest.”

Lopez reads the oath that she and other lawmakers recently took: “I shall not use my office for personal gain and shall scrupulously avoid any act of impropriety or any act which gives the appearance of impropriety.”

But she says that not all lawmakers adhere to it by recusing themselves—ie, requesting to be excused from voting—from bills in which they may have an interest, or appear to have an interest.

“A few of my colleagues have [recused themselves], but not everybody that’s supposed to actually does it,” she says. “It’s…left up to the senator, primarily, to determine what they feel is appropriate.”

Citizens can file complaints, Lopez notes, but it rarely happens: Since 2005, according to John Yaeger, deputy director of the Legislative Council Service, “about a half-dozen complaints” have been filed with the interim Legislative Ethics Committee, the House Rules and Order of Business Committee and the Senate Ethics Committee.

Complaints are made public, Yaeger explains, if a committee makes a finding of probable cause—which hasn’t happened in any of those half-dozen cases.

“If you, you know, throw somebody’s name out there in the muckety-muck and then it turns out not to be true…that person’s already ruined,” Lopez says. “And those are the things we still take sacred up here.”

Lopez has authored legislation creating an independent ethics commission to handle such complaints, but it failed.

State Sen. Daniel Ivey-Soto, D-Bernalillo, works as the executive of an association representing county clerks.

During a recent phone interview, Komadina paused to take a call from a pharmacy. Public service had a “huge” impact on his private medical practice, he says, because he stopped taking on new Medicaid patients so there wouldn’t be a conflict when he voted on reimbursements for physicians. He took on all his previous Medicaid clients for free, he says.

But Komadina doesn’t see a problem with Ryan’s dual role as a lobbyist-lawmaker, arguing that the federal government and state government are “separated” and that his lobbying experience “makes him very effective as a state legislator.”

“If there was any [conflict],” he says, “John would probably, you know, declare it and absence himself from votes.”

“I know it’s happened before,” says Monte Ward, president of the Alexandria, Va.-based American League of Lobbyists, “[but] it’s not very common.”

And when it does happen, the results can be dramatic. Just recently in Minnesota, a newspaper revealed that a state senator took a job as a federal lobbyist for a company that also lobbied Minnesota’s Legislature. (Some of Ryan’s lobbying clients do the same in New Mexico.) The day the story came out, the lawmaker resigned from public service, citing a work overload between the two positions.

Ryan’s work for the eastern New Mexico pipeline project exemplifies the gray area between state legislative work and federal lobbying.

On July 16, 2007, according to state records, Ryan attended a meeting of the Legislature’s interim Water & Natural Resources Committee in Clovis. A voucher obtained from the Legislative Council Service shows taxpayers paid Ryan—in his capacity as a state senator—$496.43 in per diem and mileage for the 212-mile round trip from Albuquerque.

But even though Ryan was there as an elected official, the meeting would also significantly affect his lobbying career.

Its agenda included a presentation by Scott Verhines, at the time a program manager for the Eastern New Mexico Rural Water System. (Verhines later became the state engineer.) The water system, a loose affiliation of eastern New Mexico municipalities, needed money to build a pipeline from the Ute Reservoir, on northeastern New Mexico’s Canadian River, to water-starved cities like Clovis.

New Mexico created the Ute Reservoir by damming the Canadian River in 1962—in part to address declines in the Ogallala aquifer. At the current rate of depletion, communities like Clovis could see their water supply dry up in 30 years, according to some estimates.

“The overall aquifer on which they all rely has been declining for decades…,” says Paul van Gulick, current project manager. “It’s been reaching the point where, you know, they can’t have a water supply from it.”

The 151-mile proposed pipeline will snake south, delivering water from the reservoir to Clovis, Cannon Air Force Base, Portales and other eastern New Mexico communities.

In 2007, fundraising efforts began in earnest. The water system needed “about $436 million,” Verhines told lawmakers, according to the meeting minutes, “which would be shared by the federal government, the State of New Mexico and local communities.”

That same day, Ryan began a $60,000, year-long contract to lobby for the water system.

Beyond his $5,000-per-month retainer, Ryan’s contract included reimbursements for reasonable expenses, including 10 trips to eastern New Mexico at $250 per trip. (It’s unclear whether ENMRWA paid Ryan to go to Clovis on that particular day.)

“Mr. Ryan may also engage in other activities as mutually agreed upon,” the contract reads. “However, he will not engage in any state legislative advocacy and all his activities associated with building a grassroots campaign will be directed towards the federal legislative agenda.”

Construction for the pipeline project is set to begin next month, says van Gulick. Seventy-five percent of the project’s funding is slated to come from the federal government, with the state contributing an estimated $75 million.

The pipeline project enjoys bipartisan support from state and federal lawmakers. Yet to some, it’s expensive and unpopular.

Currently, it faces a lawsuit from the Village of Logan, which relies on Ute Lake for tourist income from fishing, boating and golf. Logan residents worry the project may drain the reservoir. Tom Hnasko, the town’s attorney, calls it “a typical New Mexico boondoggle” that will “devastate the lake” while only producing “a drop in the bucket” for communities that need a long-term solution to water shortages.

Paul van Gulick, the project manager for an eastern New Mexico water pipeline, says the pipeline is necessary to shore up the water supply for towns like Clovis.

Bruce Thompson, the director of the University of New Mexico’s Water Resources Program says the project may not solve eastern New Mexico’s water problem. (Martinez interviewed Thompson for the state engineer post, but appointed Verhines instead).

“I am very skeptical,” Thompson says, estimating that the 16,000 acre-feet the pipeline is supposed to deliver annually is only “16 percent of what [member communities] need.”

“I think there are lower-cost approaches to solving water issues,” adds Denise Fort, a UNM School of Law professor who specializes in water law. “A demand-management approach is one that I’ve espoused.”

As Ryan was lobbying for this project on the federal level, he was also voting on it as a state senator. In 2011, he voted for Board of Finance authorizations to make loans and grants for the pipeline project. And in 2012, he voted on a bill that appropriated $210,000 of state taxpayer money to help build it. Both were large, omnibus bills that also addressed other issues.

Officials who work with Ryan on the project say he never talks about state legislative work. Would Ryan benefit from the pipeline going forward? On one hand, it seems clear: He was hired to make the pipeline happen, and continues to receive payments from the water authority as it moves forward. If the project falls apart, Ryan could lose his contract, a significant income source.

On the other hand, one could argue that Ryan’s votes weren’t crucial to getting state funding for the project, especially since the pipeline funding was tacked onto a larger appropriations bill. There’s no proof that he tried to influence other lawmakers or played any role in getting the pipeline funding into the bill.

And, to be sure, Ryan has recused himself from some votes related to the project—just not all of them.

In 2010, the Legislature passed—by wide margins—a bill creating the Eastern New Mexico Water Utility Authority, in order to formalize the loose affiliation of communities served by the pipeline. Ryan abstained from both committee and floor votes on that bill.

But the same bill also did something else: It made the water authority an organized political subdivision of the state, and Ryan continued to lobby for the newly created water authority.

New Mexico’s Constitution, however, forbids any lawmaker, during or within one year of his term in office, from being “interested directly or indirectly in any contract with the state or any municipality thereof, which was authorized by any law passed during such term.” Carraro, in his complaint to the attorney general, points to this as evidence that Ryan, by continuing his lobbying contract with a quasi-state entity that was created during his Senate term, is violating the law.

Another gray area lies in the relationships between some of Ryan’s lobbying clients, such as the water authority and the city of Clovis, which is poised to become a major beneficiary of the pipeline.

“I want to, at the end of the day, to get water to Clovis—my hometown,” says Gayla Brumfield, Clovis’ former mayor and a current board member of the water authority, justifying a recent local sales tax hike to fund the project. She says the pipeline will help buy time for future conservation efforts and more efficient drought management plans.

“It takes care of what we need for decades and decades,” she says of the pipeline.

Ryan’s lobbying work for Clovis has earned him a total of $90,000 since 2010, according to federal disclosure forms. According to recent contract materials, he has “successfully” developed “interest and support from the New Mexico Congressional Delegation to sponsor authorization legislation” for a wastewater reuse project. In 2012, he voted on a bill that appropriated $278,000 “to construct the effluent reuse pipeline in Clovis.” Effectively, Ryan was helping funnel taxpayer money to his own clients.

But according to Brumfield, Ryan’s work has been anything but conflictual.

“John just wouldn’t allow it,” she says of discussing Roundhouse work with Clovis officials. “I know the perception…But from my perspective, it was absolutely not a reality.”

Carraro says he tried to make Ryan’s lobbying a campaign issue. The effort fell flat: He lost by nearly 1,600 votes—the first time he’d ever lost a general election. Ryan raised over $77,000—$50,000 more than Carraro. Campaign finance limits cap donations directly to candidates at $5,000 per election, but reports show that Jay McCleskey, the governor’s top political advisor who also ran a separate political action committee, loaned Ryan roughly $28,000. Carraro filed a complaint to the Republican Secretary of State, Dianna Duran—but like his other complaints, nothing come of it. McCleskey writes in an email that the loan is “unpaid campaign debt.”

The campaign was tough on Carraro—financially and emotionally. He subjected himself to attacks, put off writing and sunk some of his own money into the effort.

Before the campaign, he says, “I was living the life that was the perfect life. [I] create my own world. I’m writing fiction. I go around and create this wonderful little world for me. I create all the characters…It was a great life I was leading, up until the point of making the decision to go and say, ‘Hey, you know this guy? I can’t let him be our senator.’”

Carraro is getting nostalgic. He lights up when he talks about his writing career, but becomes more agitated when the discussion returns to politics. Carraro keeps saying he’s working with two attorneys on the complaint against Ryan, but he declines to name them. Although the AG’s office confirms that it is “looking into” the complaint, nothing has come of it yet.

In the 1976 film Network, Peter Finch plays a broadcaster, Howard Beale, who one day confesses on live TV that he’s going to “blow my brains out” after he learns he’s being fired. A cutthroat producer played by Faye Dunaway convinces top brass to keep Beale on the air because of the candid performance; Beale eventually discovers that Dunaway’s character is simply using him for better ratings.

In one of the YouTube videos posted on Carraro’s website, he plays a recording of his own voice over Beale’s famous speech, which exhorts people to shout out their windows, “I’m mad as hell, and I’m not going to take it anymore!”

Carraro’s voiceover changes the wording: “I’m an average Joe and I’m not going to take it anymore! Things have got to change, but first you’ve got to get mad!”

Correction: A previous version of this article misstated that Sen. Daniel Ivey-Soto, D-Bernalillo, currently works as a lobbyist. Before his election as a state senator, Ivey-Soto worked as a lobbyist for the New Mexico County Clerk's Affiliate, according to the Secretary of State's database. He is no longer a registered lobbyist.